Streams of Gold

In a prior post, I referred to a guest opinion in the Courier Times.  The “cable franchise fee” was mentioned in that piece.  Looking into that a bit, I found that it’s neither a fee or a tax; it’s rent!

Apparently it has something to do with the Cable Communications Act (1984), which was supposed to ensure that the powers between cable operators and governments would be balanced.  Weren’t you worried about that!  Government bodies are allowed to issue franchise licenses to cable companies; the fee doesn’t have to be passed on to the consumer, but I pay an extra 5 bucks a month on my Comcast bill for a “cable franchise fee”.

The township pulls in about $200,000 a year as a landlord of something or other.  I’m really not sure what the value added is for residents.  I want cable service, but I guess I have to pay extra so that cable “thugs” don’t muscle in on Upper Makefield, sending their data streams willy-nilly and mucking up the neighborhood.

Historically, the year 2009 had the highest cable expense on the records available – about $55,000.  Usually it’s less. The cable fund covers the cost of broadcasting the township meetings.  Not all of them, mind you.  The budget workshops aren’t broadcast, neither are some special public meetings.  Why not?  There’s money to burn in that fund.

Overall, it’s quite a fee – excuse me, “rent” – that can set up a second class township fund with three quarters of a million dollars in surplus money over the years.  What township would turn down that particular stream of gold?

Maybe you remember those old sitcoms where the housewife would refer to the “First National Sofa”, meaning she was looking for extra cash that might have fallen under the couch cushions.  Government has turned into a giant sofa, with cushions galore.  Tolls funding bricked sidewalks and benches?  Why, everyone knows there are boatloads of government cash out there, you just have to know how to get it.  Tax and franchise revenues don’t have to be tied to the reasons they were levied; they can pay for all kinds of things!

It’s a peculiar situation when you think about it.  Government people are hired and paid (by taxpayers) to apply for and navigate government grants (taxpayer money), many of which are enormous and complicated. I remember, about a year ago, watching Chris Christie reacting to the news that his state lost out on a federal education grant.  The grant application was over 1,000 pages – you’d think applicants would get rewarded just for stamina! – and NJ screwed something up.  This was a grant for $400,000,000; all of the grants together totalled $4 billion.  To ‘fix’ public school systems already paid for by taxpayers.

Four billion dollars needs quite a couch cushion.

So there’s an ocean of government cash out there, but when did we stop asking: why is there so much money sloshing about?  Where did it come from, why was it originally collected, and why is it ending up where it is?

Mark Steyn has a great illustration of how things can go awry when communities are beguiled by the strange brew of federal/state/other money, and the local bite seems manageable:

A friend of mine is a New Hampshire “selectman,” one of those municipal offices Tocqueville found so admirable. In 2003, a state highway inspector rode through and condemned one of the town’s bridges, on a dirt road that serves maybe a dozen houses.

That’s the bad news. The good news was the 80/20 state/town funding plan, under which, if you applied to Concord for a new bridge, the state would pay 80 percent of the cost, the town 20. So they did. The state estimated the cost at $320,000, so the town’s share would be $64,000. Great. So the town threw up a temporary bridge just down river from the condemned one, and waited for the state to get going. Six years later, the temporary bridge has worn out, and the latest revised estimate is $655,000, such that the town’s share would be $131,000.

That’s the bad news. The good news is that, under the “stimulus” bill, they can put in for the 60/40 federal/state bridge funding plan, under which the feds pay 60 percent, and the state pays 40, and thus the town would be on the hook for 20 percent of the 40 percent, if you follow. If they applied for the program now, the bridge might be built by, oh, 2015, 2020, and it’ll only be $1.2 million, or $4 million, or $12 million, or whatever the estimate’ll be by then.

But who knows? By 2015, there might be some 70/30 UN/federal bridge plan, under which the UN pays 70 percent, and the feds pay 30, and thus the town would only be liable for 20 percent of the state’s 40 percent of the feds’ 30 percent.  And the estimate for the bridge will be a mere $2.7 billion.

While the Select Board was pondering this, another bridge was condemned. The state’s estimate was $415,000, and, given that the previous bridge had been on the to-do list for six years, they weren’t ready to pencil this second one in on the schedule just yet. So instead the town put in a new bridge from a local contractor. Cost: $30,000. Don’t worry; it’s all up to code—and a lot safer than the worn-out temporary bridge still waiting for the 80/20/60/40/70/30 deal to kick in. As my friend said at the meeting: “Screw the state. Let’s do it ourselves.”

You and I may pay an extra 5 bucks a month for cable fees, and higher tolls for old bridges, and numerous surcharges here and there for who-knows-what.  Maybe someday some of that will float back in the form of a brick sidewalk.  In between, some town in Tuscarora County has a new million dollar culvert, and a hamlet in Beaver Kill has a $500,000 bike trail.  A $569 million bus route in Connecticut?  You got it.  They deserve a bloated project too!  Bridges to nowhere, high speed rail lines servicing a handful, cowboy poetry festivals – name it and it’s on the table.

You can do those things when what you’re getting is not directly tied to what you’ve paid.  It’s all fungible, it’s all floating around in the great big comfy government sectional sofa.


4 responses to this post.

  1. Some good comments here. Delta, I see your point, but I don’t think the DRBA can allocate funds to any bridges not under its jurisdiction. I didn’t see the news article; did it mention deterioration of Delaware River structures? As far as streetscape goes, it’s my understanding that some road repairs were also made. Funding repairs of roads that get additional traffic because they lead to or from bridges makes sense to me. Beyond that, not so much.

    TomofWC, yes, taxes do live on. The classic Rural Electrification Act also comes to mind. Someday that might need its own post, if the UMT open space taxes live on to fund other things. Once government gets money, it never wants to give it up. When West and Worden argued against the one mil tax hike proposed in 2009, one of them, I believe it was West, said something about the open space debt being paid down someday and then the township will have to decide what to do with that money. My jaw dropped and I sat stupidly thinking “Whaaaat…?”

    Bacteria, I hear you, but I don’t think the cable fee is specifically a UMT issue. The 1984 act allowed municipalities to charge cable companies, with absolutely no restrictions on what they would do with that money. What Upper Makefield does is replicated in countless towns and cities across the country. Not only would a municipality never turn down “free money” like that (they get revenue without jacking up taxes), but the residents would probably go ballistic if they did. Is it a hidden cost? Yes, but I believe the way to fight that is to re-examine that act and consider pushing to revise or repeal it.

    In short, it’s kind of a hydra-headed thing. The feds wag the states and the states wag the counties and the towns/cities/townships. All via promising money, or threatening to withhold it, unless the town/county/state plays along. And politicians all too often spend time and effort trying to get that money, under the (often correct) belief that that’s what their constituents want, when what’s really needed is a way to figure out how to turn off a million and one faucets feeding the beast.


  2. Posted by Bacteria on October 17, 2011 at 6:15 pm

    Upper Makefield Township does nothing to earn this hidden tax. It is rediculous that residents kick in $60+ a year each to the Township via their cable TV bills. What will they do next? Maybe they will find a way to place a hidden tax on toilet paper. Upper Makefield needs a new Board Of Supervisors that understands the meaning of TRANSPARENCY. Residents should be aware of every dollar of tax they pay.


  3. Posted by TomofWC on October 15, 2011 at 1:11 pm

    The best example I know of illustrating a tax that is not used for it’s intended purpose (and one no one will get rid of) is the Johnstown flood tax. I think by now Johnstown has recovered from the flood of 1936. In fact it is well known that a “temporary” 10% tax on all alcohol sales, initially intended to help pay for clean up, recovery, and assistance to flood victims. The tax still exists and in 1963 was even raised to 15% and again in 1968 to 18% (not including the statewide 6% sales tax). The nearly $200 million collected annually no longer goes to flood victims, however, instead going into the general fund for discretionary use by lawmakers.[8]


  4. Posted by delta on October 15, 2011 at 12:46 pm

    A recent article in the BCCT stated that Pennsylvania has deteriorating bridges and infrastructure. And yet in UMT the Delaware River Bridge Authority found over $2 million dollars to squander on some bricks and bench’s. To heck with bridge safety, Mary needs to strut her stuff on Streetscape.


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